Lead quality is increasingly front and center for new and existing online lead buyers, but that quickly begs a debate on how to measure quality.

One of the metrics that is often quoted by buyers and sellers is cost-per-closing, essentially ROI. Now, although I do not debate this metric in running your overall business, it is the wrong metric for evaluating marketing and lead sources. Using cost-per-closing is a guaranteed recipe for treating the symptom and not the ailment. It is also the biggest cause of lead provider hopping. Both, typically create poor results.

Before, we get too deep into the debate lets review the sales funnel and who potentially impacts each layer:

• Lead Generation (marketing)
• Lead Receipt & Distribution (marketing, lead management, sales)
• Lead Contact (marketing, lead management, sales)
• Lead Application or Opportunity (marketing, sales)
• Lead Nurturing (lead management, sales)
• Lead Closing (sales)

This list makes it pretty clear where responsibilities belong and potential problems can arise through the lead lifecycle.

Here is my thesis: Marketing (your lead provider) cannot close a sale!

So, stop using it as an evaluation or success metric in selecting lead providers. Holding them accountable for your closing ratio will only allow your sales process and production to continue its failure.

Marketing can only do 5-6 things: attract attention (traffic), encourage and education interest (content), filter intent (inquiry form), verify data quality (TargusInfo, eBureau), maybe even score lead quality of intent (eBureau), and segment for your products (lead matching and distribution). These 5-6 things certainly makes them accountable for at least a portion of your success in contacting a customer inquiry and them being willing to have you quote them a product (application or proposal). But, they certainly can’t take you to the finish line.

Metrics are designed to quickly highlight opportunities for improvement and focus you immediately on where to improve. If your contact and/or application rates fall below benchmark then go to your lead provider and troubleshoot the problem. However, if your cost-per-closing or sales sink then dig into your lead nurturing or sales process.

Jumping from one lead provider to the next based on cost-per-closing is going to leave you with a busted budget and lower sales lost in transition.

Cost-per-closing is a great metric for evaluating if the online sales origination model works in your business, but it is not how yur select or measure marketing or lead providers.

Related Articles on Lead Metrics:

• Brian Carroll, “Why cost-per-lead budgets fail and fewer leads are better”
• Brian Carroll, “Closed Loop Feedback: The Missing Lead Generation Huddle”
• Bill Rice, “Kaleidico Offers Real-time Feedback to Lead Companies”
• Bill Rice, “Moneyball for Internet Mortgage Originators”